Galster v. Woods

• Decision Date: 24 September 1985
• Citation: 219 Cal.Rptr. 500,173 Cal.App.3d 529
• Court: California Court of Appeals Court of Appeals
• Parties: Mireya Dulce GALSTER, et al., Plaintiffs and Appellants, v. Marion J. WOODS, as Director, etc., et al., Defendants and Respondents. Mireya Dulce GALSTER, et al., Petitioners, v. SUPERIOR COURT of Humboldt County, Respondent; Marion J. WOODS, as Director, etc., et al., Real Parties in Interest. A021109, A020975.

Page 500

219 Cal.Rptr. 500

173 Cal.App.3d 529

Mireya Dulce GALSTER, et al., Plaintiffs and Appellants, v. Marion J. WOODS, as Director, etc., et al., Defendants and Respondents.

Mireya Dulce GALSTER, et al., Petitioners, v. SUPERIOR COURT of Humboldt County, Respondent;

Marion J. WOODS, as Director, etc., et al., Real Parties in Interest.

A021109, A020975.

Court of Appeal, First District, Division 2, California.

Sept. 24, 1985.

Redwood Legal Assistance, Stephen R. Nielson, Jacob J. Smith, Eureka, Community Advocates/Legal Aid Society, Sheryl Studley, Eleanor Eisenberg, John M. Maraldo, Watsonville, for appellants and petitioners

Office of the Attorney Gen., John K. Van de Kamp, Attorney Gen., Richard D. Martland, Deputy Atty. Gen., Thomas E. Warriner, Asst. Atty., Charlton G. Holland, Winifred Y. Smith, Deputy Attys. Gen., San Francisco, for respondents and real parties in interest.

SMITH, Associate Justice.

The question posed on this appeal and petition for writ of mandate is whether state officials charged with implementing and administering the Aid to Families with Dependent Children (AFDC) program may, consistently with federal and state law, deem a property interest held by an applicant or recipient to be "available" for support and maintenance, and hence countable in computing dollar-amount "resource" limits governing eligibility for benefits, when the applicant or recipient has demonstrated that, despite diligent and good faith efforts to sell or otherwise gain access to that resource, the resource is not actually "available." Specifically at issue is the policy of respondents whereby a property interest is deemed an available resource so long as there is no legal impediment to its liquidation and without regard to its practical or actual availability. Pursuant to that policy, each of the four applicants/recipients

herein was deemed to have an available real or community property interest resource valued at over $1,000, the current resource limitation, and was therefore denied AFDC [173 Cal.App.3d 533] benefits notwithstanding claimed actual unavailability of those resources. All four applicants/recipients timely appeal from a judgment of the superior court denying their request for a preliminary injunction. (Code Civ.Proc., § 904.1, subd. (f).) Pending appeal, they have also petitioned for mandamus relief. For sake of simplicity, they are referred to herein as appellants, and respondents/real parties in interest as respondents.

BACKGROUND

Mireya Dulce Galster separated from her husband in June 1982, leaving the family residence and taking with her her six children. Finding herself without income, funds from her husband or any other means to meet the needs of herself and the children, she applied in Humboldt County for AFDC benefits but was denied them because her community property interest in the family home that she no longer occupied was nonexempt and exceeded $1,000 in value. ¹ She promptly challenged denial of her application by requesting, on August 16, 1982, a hearing by the Department of Social Services (DSS) (see Welf. & Inst. Code, § 10950 et seq.), and a hearing was scheduled for September 23. Meanwhile, she obtained legal counsel, who made a written request for the basis of the denial and received in response copies of three documents from DSS or county welfare departments outlining a policy of assuming the availability of community property interests absent a legal barrier such as a court-ordered restraint on their disposition pending dissolution proceedings. ² Counsel The record does not reveal that DSS took formal action on Mrs. Galster's request for hearing. However, appellate counsel represents that Mrs. Galster filed for dissolution of her marriage in late September 1982 and obtained a court order restricting disposition of the community property, thereby rendering her interest in that property unavailable by respondents' criteria. (See fn. 2, ante.)

subsequently confirmed, by a [173 Cal.App.3d 534] telephone conversation with DSS legal counsel, that the action taken on Mrs. Galster's application was consistent with current state policy which was then under review and which had not yet been promulgated as a formal written regulation.

The remaining appellants share a common background. Each of their families received AFDC benefits until, in May and July of 1982, those benefits were terminated following county-level determinations that each possessed excess, nonexempt real property resources. Each requested and obtained a hearing to review those terminations, but all three proceedings resulted in proposed decisions recommending denial of their claims. Respondent Marion J. Woods, as director of DSS, ³ adopted the proposed decisions on June 16 and 24, and on September 7, 1982.

Appellant Jo Anna Kronsperger-Smith was found ineligible because she owned an unimproved lot in Lake County assessed by the county assessor's office at $1,819. The lot is inaccessible from paved roads, lies in mountainous terrain and, due to its small size--about 5,400 square feet--was subject to county restrictions forbidding the installment of a septic tank or well. She, along with her husband and two young children, had lived on the lot, apparently in an eight-by-ten foot metal shed without running water or electricity, from June 1980 to March 1982, when she was informed by a representative of a child protective services agency that her living environment was inappropriate for the children. Shortly thereafter, the family moved off the lot to Mendocino County, and appellant had her AFDC grant transferred to that county. She was notified on June 3rd that AFDC benefits would be discontinued due to her interest in the Lake County lot.

After her benefits were denied, she sought a hearing, maintaining that the lot was uninhabitable and, moreover, unsalable despite unsuccessful attempts since April 1981 to sell it at market price. A letter from a realtor with whom she had listed the property for sale stated that the land was unusable and that one would be fortunate to get $1,000 for it. Letters from a second realtor, whose office was not taking listings in that area "because they are almost impossible to sell," stated that there was no present market for the property and that it would be hard to sell for over $1000. The hearing officer's proposed decision recognized the claim of unsalability but nevertheless sustained the county's action since Mrs. Kronsperger-Smith's property was assessed at more than $1,000 and was free of offsetting encumbrances.

Appellant Rohana Williams had been receiving AFDC benefits in Santa Cruz County as the sole caretaker parent for two children when, in April 1982, she received notification that her benefits would be terminated due to her ownership of an unimproved parcel of land in Siskiyou County having a market value of $7,100 as shown on a 1978-1979 tax statement. At her hearing challenging the benefits termination, Ms. Williams evidently presented evidence that she had tried unsuccessfully to sell the property at prices as low as $6,500. However, the hearing officer concluded that, even assuming that that lower value were fair and that there were encumbrances totaling as much as $1,000, the property exceeded the maximum eligibility limitation, and the county therefore properly Appellant Robyn Burros was receiving AFDC benefits in Santa Cruz County for a household consisting of herself, her husband and their two sons. She received notice of discontinuance of benefits effective April 30, 1982, based on her ownership of land in Oregon, where the family had previously lived until January 1979, when they had moved due to a lack of work prospects in that area. The hearing officer in her case found that the property "consists of approximately four and one-half acres of isolated property. There is a cabin on the property, which has been repeatedly vandalized. The claimant had made repeated good faith efforts to sell the property on an intermittent basis" beginning in 1975, at prices of $18,000, $25,000 and, most recently, at between $15,000 and $17,000 since 1981. The hearing officer concluded that, based on a property value of $15,000 less $2,000 in encumbrances, the net market value exceeded $1,000, and Mrs. Burros was "ineligible for AFDC benefits, despite her good faith efforts to sell that property."

discontinued benefits. The hearing officer did find, however, that Ms. Williams "had made continuous good faith efforts to sell the property, both by listing that property with realtors, attempting to sell it herself through advertisements in the newspaper, and attempting to sell the property by posting signs and other indicia that the property was for sale."

On September 20, 1982, appellant Galster initiated the instant proceedings by filing, both as an AFDC applicant and as a taxpayer (Code Civ.Proc., § 526a), a complaint and petition in Humboldt County Superior Court, seeking injunctive and declaratory relief and a writ of mandate. The court denied a requested temporary restraining order on September 28, finding the issue essentially moot as to Galster because she had in the meantime become eligible once again for benefits due to having obtained an order restraining the transfer of her community property pending dissolution proceedings, but the court nevertheless scheduled a hearing on the preliminary injunction.

Amendments to the pleadings were filed on October 4, adding Williams, Burros and Kronsperger-Smith as parties (plaintiffs and petitioners), adding allegations as to them and seeking administrative mandamus review (Code Civ.Proc., § 1094.5) of their final DSS-adopted determinations. The matter of the preliminary injunction was heard and submitted on November 18 and the court filed its ruling denying the injunction on December 10, 1982. Implicit in that ruling was also a denial of mandamus relief. Notice of appeal was filed on January 18, 1983.

On January...